The Housing Crisis and the Homeownership Incentive Plan

Many new entrants into the housing market cannot afford to purchase any home at all. The proximate causes of the crisis are: 1. high and rapidly rising home prices, 2. high mortgage interest rates, 3. substantial and often prohibitive down payment requirements, and 4. high maintenance and utility costs. The net effect of the Homeownership Incentive Program is twofold. First, by better matching of the household's income and mortgage payment stream, it will reduce the initial monthly-payment barrier by nearly 25%. This result will substantially increase the homeownership market and bring it within the reach of nearly 60% of all young American families. Second, by helping the household accumulate the down payment requirement, the Program will decrease funds available to the housing industry, encourage increased savings, and assure that homeownership will become financially feasible.